A Cross-Border Corporate Agreement: Features of a Foreign Element

Abstract

The development of cross-border commercial relations results in increasing the number of legal entities with foreign participation. To ensure effective management of such companies, founders increasingly conclude cross-border corporate agreements. If disputes arise on the basis of this agreement, questions concerning their qualification may appear, in particular, regarding the determination of whether a particular corporate agreement is cross-border in nature. The range of applicable sources of law for resolving the dispute will depend on the determination. A unified approach to determining the characteristics that affect the recognition of a corporate agreement as cross-border have been developed neither at the legislative level nor in judicial practice or the doctrine. In this regard, the purpose of the paper is to analyze the impact of each foreign element (subject, object, legal fact) on the recognition of a corporate agreement as a cross-border agreement. The author analyzes the existing judicial practice and doctrine, simulates situations that may arise in connection with the conclusion and execution of a cross-border corporate agreement, on the basis of which the author comes to a reasonable conclusion that the only practically applicable criterion for identifying the cross-border nature of a corporate agreement is its subject, while neither the object of the relationship nor the fact of the conclusion and/or execution of a corporate agreement in a foreign jurisdiction affect the fact that a corporate agreement is recognized as cross-border.